Panama Papers: Secret documents reveal operations of world leaders in tax havens

A leak of more than 11 million documents of companies registered in tax havens expose presidents, businessmen, sports stars, celebrities and other personalities from around the world kept secret offshore movements.

Research Papers Panama, promoted by the International Consortium of Investigative Journalists (ICIJ, in English) and the German newspaper Sueddeutsche Zeitung, provide details on the business of 128 politicians and officials in the world. In the long list they are mentioned dozens of Argentines, including Mauricio Macri, Lionel Messi, Daniel Muñoz (former private secretary of Nestor Kirchner), the mayor of Lanús, Nestor Grindetti and businessmen linked to Kirchner.

The findings are the result of a year of work by the newspaper La Nación and Canal 13, the Argentine representatives to ICIJ, and other 100 media, including newspapers The Guardian, Le Monde, the Miami Herald and the BBC. In total, they were leaked more than 11.5 million internal documents of the firm Mossack Fonseca, a Panamanian agency known for creating and managing offshore companies in tax havens. Filtration is 46 times larger than Wikileaks (251,000 documents).

The Sueddeutsche Zeitung newspaper received millions of records from an anonymous source and shared them with ICIJ, which gathered 376 journalists from around the world. 76 countries participated collaboratively worked for a year, sharing findings and information on the respective countries. The media that participated in the investigation did not pay for the documents.

Among the most resonant cases in the world, a figure close friend of Vladimir Putin, Sergey was Roldugin owns three offshore companies, two of them created by the Rossiya Bank, based in St. Petersburg. The Infanta Pilar de Borbon, sister of King Juan Carlos who chaired a Panama-based company managed by Mossack Fonseca.

The operation

Mossack Fonseca offices in Panama.

Offshore companies are companies that do not register any real economic or commercial activity. While it is not illegal to have a signature in a tax haven, it serves as a screen to their owners to transfer money, conduct financial transactions, open bank accounts abroad and make operative without tax burdens that are in the countries of origin. As part of its modus operandi Mossack Fonseca “she lent” names of directors, managers and shareholders, in order to hide the real owners of these “ghost companies”. He worked hard to protect the confidentiality of its clients, while tried to avoid making efforts to politically exposed persons (PEP), with relative success.

Panama, British Virgin Islands, Bahamas, Cayman Islands, Nevada and Seychelles are some of the destinations chosen by the Argentines to operate offshore due to the tax advantages and bank secrecy. Many times, Argentines got involved taking money out of the country and deposited in accounts in Switzerland, Germany and the United States, among other destinations.

The filtered data (internal mails and their attachments) cover from 1977 until the end of 2015 and allow dive into the world offshore and watch how money flows secretly by global financial system, often constituting maneuvers alleged money laundering or tax evasion.

Transfers of millions of dollars in times of FX market in the recent Argentina, and hiding of companies should be declared before the AFIP (Office of Tax Collection), opening bank accounts abroad and suspected maneuvers of money laundering involving Argentines who entered this secret operative worldwide.

For Argentines, the leaked documents reveal that Uruguay was one of the most common operations for Mossack Fonseca in Panama scales. Panamanian firm worked hard to protect the secrets of their clients and to protect itself. In Brazil, Mossack Fonseca was involved in the recent case of bribery and money laundering called “Lava Jato”.

The response from Mossack Fonseca

In a written response to questions from ICIJ and its partners, the company said it "does not harbor or promote illegal acts" and that the version that provided corporate structures to hide the identity of the real stakeholders "is completely unfounded and untrue".

The co-founder of the firm, Ramon Fonseca, said in a recent interview on Panamanian television that his company has no responsibility for what customers do with offshore companies. He compared it to a “car factory” whose responsibility ends once the vehicle is produced. Mossack Fonseca blame for what people do with their companies would, he said, like blaming the car factory “if the car is used in a robbery.”

The world is a vast global offshore industry bankers, lawyers, accountants and other intermediaries working coordinated to protect the financial secrets of their clients. These experts secretly using anonymous companies “screen” or “shelf-companies” in order to disguise the origin of dirty money or tax evasion.

Carlos Dagorret
CTO Facultad de Ciencias Económicas

My research interests include distributed robotics, mobile computing and programmable matter.

comments powered by Disqus